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Fully banked means having some form of checking, savings or money market account. Underbanked means having some form of checking, savings or money market account but having used some form of alternative financial service such as: money order, check cashing service, pawnshop loan, auto title loan or payday loan.
An unbanked person is someone that does not have a checking or savings account with an insured (FDIC) institution. The term underbanked means that the household had a checking or savings account with FDIC insured institution, but regularly used alternative financial services (AFS).
Unbanked is used to describe people who do not have a bank account. The term is informally used to describe adults who do not use banks or banking institutions in any manner. Unbanked persons make payment for goods and services in cash or else purchase money orders or prepaid debit cards.
Research shows that 15 percent, or close to five million Canadians, are underbanked, and three percent are completely unbanked, meaning that they have very limited or no access to financial services within the traditional banking sector.
Key Points. Unbanked people have no account at any bank. Underbanked people have limited access to financial institutions. Everyone can benefit from establishing a bank account.
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Overall, the World Bank estimates about one-quarter of the worlds adults dont have access to a bank or mobile-phone account. But that varies dramatically by region. In countries that use the Euro, almost everyone has a bank account, while in the Middle East and North Africa, only about half the population does.
These characteristics comprise limited income, limited access to technology, limited access to banking infrastructure, limited means of receiving money, and a lack of documentation, as summarised in Table 2.
The unbanked are often concentrated in less developed countries or in poorer regions of developed countries. A lack of money, trust, and privacy concerns are three main reasons why people in the U.S. are unbanked.